2007 Supreme(SC) 1323

2007(7) Supreme 704
Supreme Court of india
(From Chhattisgarh High Court)
Tarun Chatterjee & P. Sathasivam, JJ.
BCPP Mazdoor Sangh & Anr — Petitioner
versus
N.T.P.C. & Ors. — Respondents
Appeal (civil) 678 of 2006
WITH
Civil Appeal Nos. 683, 724, 726 and 727 of 2006
Decided on : 11-10-2007

important points
Merely because an alternative remedy was available, the writ cannot be held to be non-maintainable.
Any agreement affecting the service conditions of the employees cannot be concluded without their express consent accorded consciously.

Headnote:(a)Constitution of India – Article 226 – The writ application sought interpretation of certain clauses in the agreement and appointment letters wherein no disputed facts were involved; the issue related to employment of few hundreds of employees who asserted that they were being transferred to private organization from a public sector undertaking without their specific consent which was arbitrary and unreasonable – In such situation merely because an alternative remedy was available, the writ could not be held to be non-maintainable. (Para 18)

       (b)Indian Contract Act, 1872 – Section 23 r/w Article 14, Constitution of India – Clause 21.0 of the agreement dated 22.05.1990 providing for giving effective date and duration to the agreement wef 29.06.1987 is contrary to provisions of section 23 – Clause 21.0 of the agreement also effectively changes service conditions of the employees appointed much before the agreement – This is violative of Article 14 – Finding of the High Court that the services of the employees appointed by NTPC are transferable to BALCO in the light of the provisions made in clauses 8.2 and 16.3 of the bipartite agreement dated 22.05.1990 between NTPC and BALCO is therefore not acceptable. (Para 22)

       (c)Indian Contract Act, 1872 – Sections 23 r/w 16(3) – The undertaking obtained by NTPC from its employees much before its agreement with BALCO was a result of undue influence as defined in section 16(3) exercised by it – Hence it was held violative to provisions of section 23. (Para 24)

       (1986) 3 SCC 156 – Relied upon.

       (d)Constitution of India – Article 12 r/w Article 14 – NTPC being an undertaking of the Government of India and an instrumentality of State is under constitutional obligation to act fairly with its employees – The posts advertised from 1986 to 1988 not being in existence in BALCO and BCPP having not been commissioned till then, NTPC was not justified in inserting clause 14 in the appointment letters and obtaining undertakings from the selectees. (Para 25)

       (e)Service Law – Service conditions – The terms and conditions of appointment clearly show that NTPC was the appellant’s employer for all purposes – Materials on record showed that clause 14 in some of the appointment letters was against public policy and contrary to section 23, Contract Act – Said clause seeking to change status of public servants without their consent hence held violative of Article 14 of the Constitution. (Paras 26 and 27)

       (1990) 3 SCC 752 – Relied upon.

       (f)Service Law – Service conditions – Any agreement affecting the service conditions of the employees cannot be concluded without their express consent accorded consciously – Consequently, in order to bind the appellants, there must be a tripartite agreement, in absence of which the transfer from one employer to another cannot be affected. (Para 28)

       (1940) 3 All E.R. 549; (1969) 2 SCR 272; (1989) 1 SCC 764; 1989 Supp. (1) SCC 679 – Relied upon.

       (g)Constitution of India – Article 14 – Clause 16. 3 of the agreement between NTPC and BALCO being discriminatory, employees have made out a case for continuing their service in NTPC. (Para 32)

       (2002) 2 SCC 333; (2006) 10 SCC 66 – Distinguished impliedly.

       Facts of the case :

       1.The appellants are employees recruited by National Thermal Power Corporation (NTPC) by following the procedure. When steps were being taken for transferring them to Bharat Aluminium Company Limited (BALCO) which was originally a Public Sector Undertaking under the Government of India, subsequently by policy of disinvestment the entire management had vested with M/s Sterlite under Agreement dated 20.06.2002 w.e.f 01.07.2002. Aggrieved by the decision of their transfer from a Public Sector Undertaking to private management, those employees approached the High Court. They mainly prayed for an order declaring clauses 8.2 and 16.3 of the agreement dated 22.05.1990 as illegal, arbitrary and unenforceable against them who are non-executive workers as it unilaterally changes the service conditions of all those employees who were not party to the agreement. In the same writ petitions, they also prayed that the respondents-Management be restrained from enforcing the said clauses and thereby transferring the non-executive workers working under BALCO Captive Power Plant (BCPP) to the management of BALCO from NTPC.

       2.High Court dismissed the writ petition.

       Findings of the Court :

       Actions of NTPC are contrary to the Contract Act and violative of Article 14 of the Constitution. Appellants are entitled to continue in the service of NTPC.

       Result : Appeals allowed.